Bridges Weekly Trade News Digest • Volume 5 • Number 38 • 6th November 2001
FAO International Undertaking Finally Adopted
After seven years of difficult negotiations, the revised International Undertaking (IU) — now International Convention (IC) — on Plant Genetic Resources for Food and Agriculture (PGRFA) was finally adopted by the Conference of the UN Food and Agriculture Organization (FAO) on 3 November, making it the first binding international instrument dealing specifically with the conservation and sustainable use of PGRFA. It still remains to be seen, however, how the IC’s provisions will influence discussions at the WTO and which countries will actually ratify the Convention.
The revision of the IU to harmonise it with the UN Convention on Biodiversity (CBD) has been underway since 1994. In its original form as a non-binding agreement, dating from 1983, the IU was based on the principle that PGRFA should be "preserved [...] and freely available for use, for the benefit of present and future generations" as part of the common "heritage of mankind." To date, 113 countries have adhered to the IU, with the notable exceptions of Brazil, Canada, China, Japan, Malaysia and the US.
Agreement on IPRs despite US and Japan opposition
An Open-Ended Working Group met from 30 October to 1 November in Rome, Italy, alongside the FAO Council to finalise the issues that had remained unresolved at June’s Sixth Extraordinary Session of the Commission on PGRFA (see BRIDGES Weekly, 3 July 200). One of the most contentious points on the agenda related to Provision 13.3(b) of the agreement, ie whether "genetic parts and components" received from the Multilateral System (MS) should be patentable. [The MS refers to a system for PGRFA established under the IC that aims to facilitate access and benefit-sharing].
After long and heated debates, delegates decided to keep the original text — minus the brackets — which stipulates that "recipients shall not claim any intellectual property or other rights that limit the facilitated access to the plant genetic resources for food and agriculture, or their genetic parts and components, in the form received form the Multilateral System". Both Japan and the US opposed this formulation and consequently abstained from the final vote on the adoption of the IU. The US in their statement during the Final Plenary noted that it would be unable to ratify the agreement due to the restrictions it places on innovations. Some observers have questioned the usefulness of the Agreement if the US — as one of the key countries involved in plant breeding and genetic engineering — is not bound to the treaty’s provisions.Canada, and Japan also expressed concerns regarding the consistency between the IC and existing intellectual property rights (IPR) regimes, such as the WTO Agreement on Trade-Related Intellectual Property Rights (TRIPs) and in particular Article 27.3(b) which requires Members to grant patents on micro-organisms and non biological and microbiological processes, and to establish some kind of intellectual property protection for plant varieties. Some observers noted that the IC might provide an important precedent for the unresolved discussions on the review of Article 27.3(b) at the WTO.
Another overlapping area concerns the IC provisions on benefit sharing which provide for monetary contributions derived from the commercialisation of products developed from PGRFA accessed under the MS. The payment is mandatory when the commercialisation of the product restricts the product’s availability for use in further research and breeding, and voluntary when the product is freely available for such purposes. While the IC does not explicitly discriminate between IPR holders - who are by definition conferred exclusive rights under TRIPs - and others, some observers speculate that it does so in practice due to the different rules for products available for further research and breeding and those that are not. Depending on how governments incorporate the IC’s provisions into their IPR regulations, the possibility might arise that they could be challenged on the basis that in doing so, they contravene their TRIPs obligations under Articles 27.1 and 29 by imposing additional conditions for IPR protection.
Other resolved issues
Trade concerns were also raised in the context of Article 19.4(d) on financial resources for national activities for conserving and sustainably using PGRFA. In particular, delegates discussed a proposal by Australia to include a reference to avoiding subsidies in the text. Several countries opposed the reference, including Thailand which argued that subsidies should be discussed at the WTO. The EU pointed out that this language would introduce trade issues inconsistent with the rest of the text. In the final text, the Article simply states that the provision of financial resources should not be used to ends inconsistent with the treaty, in particular in areas related to international trade in commodities.
Delegates furthermore agreed on the text of Article 4, which deals with the IC’s relationship to other international agreements. The final text affirms the mutual supportiveness of relevant international treaties and the absence of hierarchies between them, thus leaving the relationship as ambiguous as in many other international negotiations, such as the Cartagena Protocol on Biosafety (see BRIDGES Weekly, 8 February 2000). Thus, which agreement would prevail in the case of a dispute remains unclear.
Regarding Annex I of the IC, which lists crops for inclusion in the MS, delegates retained the list of 35 crop genera and 29 forages already agreed to in June despite efforts by the EU to expand the list. Some observers pointed out the paradox that a small list, as proposed by many developing countries, would actually leave a large number of crops, which are not included in the MS, available for patenting. Others also questioned whether the list, be it short or long, could actually be itself be sufficient to ensure food security, considering that the agreement will not affect the international agricultural trading system with its distortions, subsidies and other barriers to market access for developing countries.
The IC is now open for signature and will enter into force 90 days after ratification by at least 40 signatories, provided that at least 20 of the 40 signatories are Members of the FAO.
For further information on the IU’s trade implications, see BRIDGES Year 5, No. 6 (July-August 2001), p. 11 (http://www.ictsd.org/English/BRIDGES5-6.pdf). Documents of the meeting are available at http://www.fao.org/waicent/faoinfo/agricult/cgrfa/IU.htm. For daily coverage, see IISD Linkages at http://www.iisd.ca/linkages/biodiv/iu- wg/.
ICTSD Internal Files; ENB, Vol. 9 No. 213, 5 November 2001.